Major Mike Rountree, (C) a marine fighter attack training officer, shows naval flight students a U.S. Marine F-35B Joint Strike Fighter Jet during a roll-out ceremony at Eglin Air Force Base in Florida..
WASHINGTON: The Pentagon said it had finalised two contracts with Lockheed Martin Corp valued at $7.8bn for 71 more F-35 fighter jets, citing what it called significant reductions in the cost of the new radar-evading warplane.
The US Defence Department said it signed a $4.4bn contract for a sixth batch of 36 F-35 aircraft, with the average cost of the planes down 2.5 percent from the previous deal. All but $743m of that amount had already been awarded to the company under a preliminary contract.
The two sides also signed a $3.4bn contract for 35 aircraft in a seventh batch, which reflected a six percent drop in the average price from the fifth group, it said in a statement.
The Pentagon’s F-35 programme office said the cost of each F-35 conventional takeoff A-model jet would drop to $98m in the seventh batch of jets, excluding the engine, from $103m in the sixth lot. It marks the first time the price of the jet will have dipped below $100m.
The US government buys the engines directly from Pratt & Whitney, a unit of United Technologies Corp, under a separate contract.
The Pentagon has projected it will spend $392bn to buy a total of 2,443 stealthy F-35 fighter jets over the next few decades to replace F-16, F-15, F/A-18 and other warplanes used by the US Air Force, Navy and Marine Corps.
The programme is years behind schedule and nearly 70 percent over original cost estimates, but US officials said last week the programme is now making progress in flight testing, production and long-term operating costs.
Lockheed and the Pentagon announced an agreement in principle for the next 71 jets on July 30. Rear Admiral Randy Mahr, deputy director of the Pentagon’s F-35 program office, had told reporters on Wednesday that he expected the contracts to be wrapped up within days.
Lorraine Martin, Lockheed’s F-35 programme manager, said production costs had declined with each successive lot of jets.
“That’s a trend we look forward to continuing as this programme moves toward full rate production and operational maturity,” Martin said in a statement.
“Working together with the Joint Programme Office, our entire industrial team is focused on delivering the F-35’s fifth-generation capabilities to our armed forces and partner nations at a 4th-generation price point,” she said.
Industry executives use the phrase fifth-generation to refer to the jet’s stealthy coatings and other features that make it nearly invisible to enemy radar.
Lockheed is building three variants of the F-35 for the US military and eight countries that helped fund its development: Britain, Canada, Australia, Turkey, Italy, Norway, Denmark, and the Netherlands. Israel and Japan have also placed orders.
The F-35 remains in the running for a 60-jet South Korean fighter competition after Seoul this week rejected a bid by Boeing Co involving its F-15 Silent Eagle fighter jet.
South Korea would have to make a commitment by the end of 2013 to secure a place in the ninth low-rate production contract for F-35 jets and ensure delivery of the first planes in 2017, said one source familiar with the program.
The overall contract won’t be negotiated for some time, but the Pentagon plans to award a contract for early procurement of materials for the jet in coming months, said the source.
South Korean officials have been in touch informally with the US military to understand the timing question, said the source, who was not authorised to speak on the record.
A second source familiar with the F-35 programme said it typically takes about two years to build a jet, and there might be ways to accommodate Seoul if it decided to order jets after initial “advanced procurement” funds were awarded to start ordering parts for the ninth batch of jets. Lockheed’s main subcontractors on the programme are Northrop Grumman Corp and Britain’s BAE Systems Plc.
The Pentagon said the price of the Marine Corps’ B-model jet would drop to $104m under the seventh contract from $109m in the sixth. It said the cost of the C-model plane, which will land and take off from aircraft carriers, would drop to $116m a jet from $120m in the sixth lot.